# How I Scaled My Sales Team [Compensation, Recruiting & Training]

Channel: Alex Hormozi
Video: https://www.youtube.com/watch?v=okA9Yt2KZuk
Duration: 1 hr 10 min
Language: English
Words: 15952
Transcript page: https://viewrankai.com/tools/youtube-transcript/okA9Yt2KZuk

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[0:00] I own a portfolio of companies that does $85 million a year. And I was recently invited to Taki Moore's masterminded keynote for his 8 figureure and up group. And it was a really fun discussion and presentation that I was able to give. I was very humbled to have been invited. And we talked about two main things that those business owners wanted to know. So if you're not at that level, this may not be for you. But we talked about two things. The first was how to scale a high performance sales team. So among our portfolio companies, I think the biggest team we have in those companies is a 26 person sales

[0:25] team. So we know what it looks like to recruit, hire, manage, incentivize, and drive high performance sales. We've done that before with inbound and outbound sales, meaning cold calls versus taking, you know, phoneunnel type type inbound leads through applications. So we've done both of those and the other was more high level. So the conversation is kind of split into two pieces. One is focused very very sales focused and the second is focused on what I would consider highle observations of entrepreneurship of things that we've learned, lessons, beliefs that have served us well um in creating the portfolio company that we have. So uh if

[0:52] you don't know who I am, I'm Alex Rosie. I own acquisition.com. I hope you enjoy the video. Uh so this is Alex and Ila Power Team. Uh they run a portfolio of companies. Uh probably many of you guys know them from their gym launch days and times. Uh team, what I'd love to chat with you about is scaling lead genen with um with outbound. Uh and then let's talk about uh scaling and exiting. Dude, can we talk about outbound? Because a while ago, like when we first met, you were

[1:20] like the king of the ads, right? Yeah. Yeah. And then you then you weren't and the ads kind of disappeared and I want to know kind of what I don't want too many people to know that though. [laughter] [clears throat] Are we allowed to know that or you don't want No, no, no, no, no. I We're we're we're

[1:35] cool. Everybody here under a friendda. That's my understanding. Right. Friendiera. Yes. 100% frienda. If you're cool with that, can you type frienda into the chat? Means everybody's officially signed. So, um I think I think it would it would serve everyone to do a little bit of backstory in terms of why like why would you even start something like this, right? because you're like, I'm already killing it on Facebook. I'm killing it on Tik Tok. I've got YouTube guides

[1:54] going, etc. I will say that I'll tell you why I started, which will probably lead into the second half of this story, which is what um I I told Taki, he was like, I want you to talk about this, and I was like, I I really want to talk about this. And he was like, okay, well, how about we talk about my thing first and

[2:08] then we can talk about your thing. Yeah. So, um uh two years ago, Leila and I uh you know, we were we were you know, we at that time only had two business. So, we had gym launch and prestige labs. one is the supplement company, one is the gym licensing company. And the company at that time was doing about a million a week. And we just finished our best month ever. And we're walking outside and she looks at me and she's like, "I

[2:29] don't want to do this anymore." She's like, "Let's shut it down." And I was like, "Well, uh, okay. Uh, maybe, um, let's, you know, let's see if we can get anything for this, right?" And so I just immediately was like, I just agreed. I was cool. I was in tons of pain as an entrepreneur just, you know, doing all the things. And um anyways, I called up a friend of mine who was in the space and he was an investment banker. He had sold similar companies and I was like, "Hey, these are our numbers. Like, what do you think we can get for this?" And he was like, "Holy shit." He's like,

[3:00] "You get like 250 million if you just finish the next 12 months at this rate." And I was like, "250 million with an M?" He was like, "Yeah, you did 17 million profit your second year. Like, yes, I can. Yes, we could do that." So I look at I was like, "Well, you got 12 months in here." And

[3:20] she was like, "I got 12 months for 250." I was like, "Okay, let's do this." Right? And so that began what became a two and a half year journey. Um that eventually uh resolved in us selling the business. And so I want to walk through kind of that process. And the first year of that was us realizing that we didn't actually have a business. We had a big guru brand, right? Um at the end of the day, I was at the events. I was the one who made the products. I was the one who

[3:44] did the the coaching calls every week. Probably something that some in a similar spot that some of you guys are in. And so, um, the the biggest kind of weakness was that I was inextricably linked with the brand. So, that was number one. Number two, and this is what I'm going to focus on first, and this I'll hopefully tie both these stories together, is that we were we were channel dependent. All right? And so, we were selling uh gym owners, right? So, business owners. So, we're not in like the online fitness space. We're hardcore brick-andmortar. the I talked to a couple other bankers, couple private equity firms, people that I knew through

[4:14] the network, asked them for people, and I was like, what do you see as the weaknesses in our business? Like, how can we make this better? And the two big the three big things they said were churn, uh, in terms of how long customers stayed, they said my name being the brand, and the fact that we were channel dependent on Instagram and Facebook, and that was it. And that was

[4:32] 100% of our of our sales sales volume. And so, we kind of set out to to fix that. And so, um, I'll just talk about outbound since that was the channel that we chose, uh, to be our next thing. And it was because I could never get YouTube to work in my niche. Um, you know, if you're a little more mass, I think it's

[4:49] maybe I'm a It's very possible. Um, but I couldn't get it to work. Um, we have seen Tik Tok working as a side note, but for today we'll talk about outbound. So, the outbound process takes significantly longer than most people expect. That being said, it's part of the reason that private equity and potential acquirers will value it is because it is this sturdy machine because if tomorrow Facebook ads shut me down, it doesn't matter because if I literally have a phone, we can make money like a phone, which is crazy to like the concept is still foreign to me. And so I want to tell you the sales numbers so

[5:25] that you can have perspective in terms of how long this took. So the first month we made one sale. The second month we made two sales. The third month we made four sales. I like where going and mind you this is months. So you're like 90 days in at this point you're like we've been putting effort towards this etc. Right? And so one of the key differences to note with manual outbound whether you're doing cold calls, cold emails, cold texts, whatever it doesn't matter which like the primary way of doing it we do a combo and I'll get to that in a second. um is that

[5:55] every aspect of the funnel that we do digitally is the same except it's purely manual. So you have human variables that contribute to every step in the pipeline. Right? So we did two, we did four. Uh the next month we did uh I think it was six or eight. Uh and then we jumped to uh 12 and then we jumped to uh 16 and then we jumped to and you'll notice that this isn't uh quadratic. So it's not exponential. What you will see there is that it's more linear in nature. And it's because we continue to add. So our price point is between right now it's

[6:32] 20,000 is the cheapest thing we sell, which is a great point, Bill. So thank you for bringing this up. If you want to do outbound, your ticket has to be at least 15,000. Like it the the the the unit economics don't really work. I guess they do. I just prefer to have lots of margin, but in theory it

[6:50] should be 15 time 15k or more, right? And so for us, our LTV is $40,000 at current. Right? Now it's gone up, but when we started this, the LTV was 40K because I started this in Corona for brick-andmortar gyms because we're brilliant, right? So, if you continue this thing out, um, it took, so we're now we passed we're we're at month 14 from when we started and now, uh, 14 months in. Uh, it does about 45 sales a month, which for us is roughly 60% of our sales volume. So, we we we hit the halfway point and now we're a little more than half um, in

[7:28] that in between. Yeah, it's probably better than me pretending to draw. I I'll get to my drawing thing in a second or you'll be able to do it better. So, I I wanted to set this as a precedent because I had two different times where my leaders came to me and were like, "Dude, should we continue to do this?" And I just remember looking at them and I was like, "This is why no one will remember your name." Um, I'm kidding. I didn't actually say [laughter] that. Um but but I was like guys as long as we are seeing progress through the funnel we have to continue because the end goal

[7:54] is I either have to own this thing for the rest of my life which is okay or and I need to do it without it being dependent on a single channel which I should do as an owner regardless and that'll feed into the second part of the story or or we'll never we'll never be able to get out of this or or exit it either way because you have to exit right every you know we have to sell and we're either selling it from our old self to our new self or we're selling it

[8:17] from our old selves to a new acquire. But either way, we have to get out of it. Um, the channel dependency at a certain point. If you're below 10 million, I don't think you need to worry about this. But once you're, you know, once you're at 10 million, I think adding the second channel is important

[8:29] in terms of the uh tactics around this. Understanding the organizational chart which creates the sale and the actual process of the sale is kind of where we should start. So there are three different roles in our sales system. All right. The first is we have we you know different there's SDR BDR the whole point is that it's the co it's the first touch point it's the outbound person SDRs and BDRs I think we call them what do we call them BDRs I don't remember whatever guy yeah I think we call them BDRs so and this is an important point for everyone it's good that you leave this

[9:05] this three the three lines because this is cool because there's going to be more detail in each of them so we've got BDRs as level one level two we've SDS which is sales development specialist. These guys qualify the leads and provide the value that the original person was promising. The third person is what we call BC so business consultants and these are the closers. Right? We technically have a fourth for we have another team that does all of our ascensions um that sells the the 40k product. But this is uh and it looks like a Christmas tree if you were to

[9:37] look at the org chart like this, right? You got the base of BDRs who feed half as many uh SDS's who then feed half as many uh BCs. In this model, if you replace a BDR mentally with what an advertisement used to do, that's exactly how this functions. The exception to this process compared to your uh uh inbound efforts are there's usually one additional call

[10:04] typically. So what we do is that you we scrape lists off of Google. We have VAS in the Philippines enrich the data which just means that they make sure that these are real real gym owners that have actual facilities and these numbers work and these emails are verified. Um the actual like what software they use I honestly have no idea because the person who

[10:26] manages that team is two steps from me. But that's what they do. From there our BDR team calls this list through phone burner. So, phone burner is the tool we use. We really like it. It's It's been exceptional. I highly recommend it. Those BDRs are required to make a hundred calls a day. The way that we structure this is that they get four hours to work per day. All right? And we purposely set it up that way so that we could have good salespeople who want to who want to moonlight. So, they've got extra hours and they do call blocks. The other reason is because the sales

[11:01] manager that I hired to build this entire team, his experience was that people cannot be productive for eight hours straight cold calling. He said if you give them eight hours of pay, he's like they'll do five and a half hours of calls. He's like, so you might as well do four hours of pay and get three and a half. And so that was an efficiency thing. They are still expected to make 100 calls a day. From those 100 calls, they're expected to have two appointments that show. Now, we have been doing this a long time now. And each of these steps took like each one of the things that I just mentioned

[11:30] probably took two to four weeks to figure out where do we scrape the data. How how do we how do we enrich it because we're calling all these bad numbers right now that we're getting people to uh pick up which by the way phone burner wraps it with a local area code. If you don't have that feature there's no point in using it. Like you need to wrap in a local area code or your pickup rates going to be All right. So from there you'll get your 100 dials. You'll get 20% to pick up. So it's 100 to 20. From the 20, we will have two who schedule and show. I only

[11:59] know the two because that's the only thing we compensate them on. All right. And so the expectation is that they get two. In the beginning, it'll be one. Yes. All right. Uh 100 to 20 to two. What's the uh dumb question? What's the 20? What's the two? 20 is 20 is pickups. So 100 dials, 20 pickup. Hello. of the 20 pickup, we get one to two uh to to to show uh and that's to show for the SDS. Yep. Exactly. Now, this is a good thing for you guys, too, is that every once in a while, you'll get you'll get a savage and you'll know because they'll

[12:35] set five a day because if you guys picked up the phone and do it, you could set five ones. If someone picked up, you could probably set them, right? But somebody who's newer, the nice thing with the BDRs is it takes two days to ramp them up. It's not a hard position to teach.

[12:46] Yes. Here's the list. Here's the phone. say these words. The phone calls are like five to 10 minutes. Like they're not hard to train. And if you have a big repertoire of existing calls, which you will, uh, it's easy to just have them listen to those. So, uh, can we can I be a gym for a

[13:02] second? Yeah. Oh, I've never done the calls. I have no idea. Do you have a rough idea what they say, what it's about? So, our our whole pitch is basically like, hey, we've been calling some gyms in the area. Um, they've been struggling with XYZ, you know, biggest concern one, two, and three. And so what we're doing is like if gyms don't exist, our company doesn't exist. And so we'd like to just give you some of the stuff that's

[13:21] working well for them. Is that okay? This is from our private client thing, which normally we charge for, but we just want to help gyms out. Cool. Okay. So what I'll do is I'll set you up with an appointment uh with Sean tomorrow, and he'll run through each of these systems for your gym uh so that you can insert dream outcome that you want, which is get more leads, make more

[13:39] sales, charge more for it. Yeah. Awesome. Okay. That's super helpful. Yeah. Great. Great. Right. Right. And the and the BDRs will typically uh if they're good, they'll look up the gym before they make the call. Um and so they can be like, "Hey, saw that you posted that thing. Yeah, I'm calling from, you know, from gym launch. Don't worry. Like just want to help you guys out. We're talking to a lot of gyms in

[13:58] the area." Like tonality matters, right? Like that's the stuff that the manager will teach them. Um but it's like this is a good well play for us. It's like we just want to help you out. We want to give you some stuff. No strings attached. They say cool and then they show up for the SDS. right now. Getting getting them to show for the SDS, it's

[14:15] like you got to get them to show sooner. We need to make sure that the thing that you were giving them, they truly perceive as valuable. And this is probably one of the biggest things that I can that I can if I can, this one took us longer to figure out is and I don't think like lead magnets and stuff like

[14:30] that is valuable. Like it's got to be like it has to be something that people really want in your space. So, even if it's something that's unscalable, do it unscalable and then figure out a system to scale it once you get the um once you get the flow going, right? Because in the beginning, you're going to have one or two callers. It's not going to be a ton of volume. I promise you. Um and then you'll you'll be able to figure out what's the thing that gets them to show

[14:51] up that they really want, right? Can you give I mean, back in the day, SEO was Sorry, go ahead. Yeah. Sorry, dude. Can you give us an example of what a valuable not lead magnet useful thing might be? I think we walk them through uh how to set up their sales room and the scripting that they use that that we get, you know, it'll double the amount of people who sign up or whatever. So, it's a really valuable

[15:11] thing, right? And then it's like, yeah, you'll walk him through, he can show you around, blah blah blah blah blah. And then Amazing. It's a cool thing and we can and they can sell the benefits. Like, if you had twice as many people sign up and nothing else changed your life, would that be cool? Cool. All right. He's going to show you how we do it because this is what the top 1% gyms are doing. We just want to help you out. [clears throat] Okay. Loving the script. We just want to help you out. High valuable thing. Old school teley marketing. Rob Nixon, you

[15:35] love this. Chiron says stud. So once we uh once we get them to the SDS, the SDS is full requirement um is that they provide value. Crazy as I know. Is that you actually deliver the thing that they think is really cool. Now here's the key point is that we want to show expertise. So the SDS for us almost exclusively is exclients. Now, we may be in a situation where, you know, our clients are able to do that. Like, you have to show some domain expertise, especially around this thing. And the idea is if we can show a couple of like really in-depth nuggets that they're

[16:09] like, "Shit, I didn't think about that." While they're going through the process, they're like, "Fuck, these guys know what they're talking about." And so, what happens is we we we terminate the uh the the value delivery and we purposely leave about 15 minutes at the end, you know, of dead time that we would transition to getting them set up on another call. How long is this

[16:28] call? I think it's 45. So, it's 30 to do the thing, 15 to to set the next uh deal. Perfect. The the the SDS is like, "Hey, you know, I couldn't I can I switch hats for a second? I know I'm just here to help you out, but and we purposely make that to change the the frame, right? We're trying to make a little little frame shift, which is like I couldn't help it here, but when you were saying some of these things, I couldn't help like this this stood out to me. This stood out to me. This Have you thought about these things?" Because honestly, I just showed

[16:56] you this little thing, but that's like 1% of actually the amount of juice you could squeeze out your gym. Because like if we just did the thing that we just talked about, you double your business. But but like what about orders of magnitude? What if we can get to like 5x the business? Because right now you're running 10% margins. And if we can get you to 35%, we just three and a halfxed your take home income only by changing the way you price. Would that be

[17:15] valuable? Okay, cool. So, do you know what we do? Because at this point, we haven't talked about us at all. So, think about it. First call all about them value. second call providing value. second half of that call, couldn't help but act XYZ. I don't normally do this, blah blah blah. Do you know what we actually do? And they're like, "No." I was like, "Oh, shoot. I I feel so stupid." Yeah. So, we literally help people just like you fix the thing that you just said you want with the thing, you know, by overcoming your biggest insecurity and fear. And they're like, "Oh my god, that's

[17:47] awesome." It's like, you know, we actually do this a hundred gyms a month. Like, we can we can walk like this is our bread and butter. I didn't know you actually needed this. I just wanted to provide this for you to help you out. Oh, wow. Well, okay. Let me see here. Hold on. Let me check with one of the one of our guys. You got 15 minutes. Okay, cool. We're good. Um, you're a business owner. Why don't we see if we can um

[18:07] uh set this up for you right now? Right. Let's be efficient with your time. Hold on one second. So, then we call the closer. Yeah. We call the closer live and then they have a dialogue that's scripted, but it's speaker phone. Yeah. The person who's on Zoom right now doesn't know that this conversation is

[18:24] scripted, but they can hear both sides. And this guy's like, "Dude, I'm super busy. I got so many gyms I got to talk to. Um, I got a hard stop in 15. I can maybe hop on." Um, okay. No, this guy's really awesome. He's he's a qualified gym. No, he's he's legit. He's big enough for us. Okay. Okay. Well, you got to make sure he's the right size and that he's got the that he understands what we do. Oh, yeah. Yeah. No, no, it's it's all good, right? Okay, cool. Then I got I could hop on for 15 minutes. guy hops into the Zoom, makes the

[18:50] introduction, and the goal here is not to sell them. The goal is just to connect them and build rapport. That's all it is. Because we could not get the S, and this took us like two months to figure out. We could not get the SDS to show for the close calls. Like those the qualified appointments, we couldn't get them. They would set it, but they

[19:07] wouldn't show up. And so, we tried doing three-way text. We tried like we tried a bunch of things. But if you do the face to face where they hop on the call, then they're like, "Yeah, perfect. Well, I got to go in five, but I've got you down for tomorrow at 4:00. We're good to go and rock and roll." Right? And just to be clear, like this is no longer us giving you thing. I'm going to explain how our services work, our pricing, and see if

[19:28] it's a good fit. Right. And so they clearly set the expectation that this is a sales call and that I will be trying to close you. And we're very clear about that. Yeah. And it's cool because we just had two calls. We provided value. At this point, we transition. They show up the next day and it's and it's just like your inbound closing,

[19:45] dude. A little bit off. So, here's the advantage to this. There's there's so much more. So, here's the advantage to this model. So, four callers. Sorry. Sorry. Uh uh if you're looking at appointments, right? Yep. For us, we closed uh 10% of of scheduled SDS. So, if there's two of these, right? two of those. We closed 10% of those of showed uh set calls. We closed 10%. So we'd close 02

[20:16] uh in that example, right? Yeah. Exactly. And so for us, the cost uh to acquire a customer from an advertising, I'll use cold calling as the advertising here, is they get they get uh they get 50 bucks for every show. So it's $500, right? So, it's 500 bucks in in BDRs per close, which for a $40,000 LTV is pretty cool. And so, that works out pretty well for us. And so, the beautiful part about this model is that it t So, the downsides are the upsides with this. It takes a long time to build and it's and

[20:55] it also is impossible to break. Yeah. It's not I can tell you I sleep so much better as a business owner knowing that no matter what happens tomorrow, we're going to close deals. So this is the part that I think everyone needs to uh if you want to scroll up on this is the this is the the more genius you'll need a fresh page. So

[21:14] I got you. So this is a key point that is sexy as All right. Um who here would love to have a sales team system a farm for building salespeople? So we so my CEO uh was an ex pro baseball player. So, we use the B the pro baseball player analogy a lot. So, right there in front of you, you've and we even use the we even use the terms, right? So, we've got double A, we've got AAA, and we've got the bigs, right? And so, double A is the BDRs, uh AAA is the SDS's, and then the bigs is like the big leagues, right? And so, the

[21:51] key point here, and this is like for those of you guys who are building 30 million, like this is where this gets interesting for everyone, right? is that the the human resource training system itself becomes an asset to the business because we know that when someone works their way up from being a BDR all the way to a BC, they know how to close because these people were never spoiled with inbound leads. They got hung up on and cussed at. And so you guys want to know an interesting stat? Our inbound closing percentage, and we were considered pretty good at sales before

[22:26] this, went from 20 20 to 25% to 60%. Yeah. Wow. Cuz they were they cut their teeth at the bottom. Yeah. They're like, "This person knows who we are, asked for help, and wants more information." They're like, "For real?" [laughter] Right. And so here's here's why this is important with the titles. So BDR, there's four levels of BDRs. You've got junior BDRs, you got associate BDRs, you've got BDR, and you've got senior BDR. And that same four-step system applies to all of the levels. Junior,

[23:03] junior. Yep. Associate. Yeah. The name and then uh what was the top thing I just said? Um senior. Yeah. So think about your highest turn positions, right? The reason that the positions are high turn is because they cannot see progress. People lose hope when they run out of future, right? I think Dan Martell said that. I really like that. So they run out of future. So what we need to do is create

[23:25] Yeah. We need to create future for them. And so it's my belief that a salesperson has like six to eight weeks of steam in them before they start getting disheartened. And so what we did is that we created milestones, which are those qualifiers on the right, where if you hit a an objective qualifier, you move

[23:44] up. Mhm. And so if as a junior it it would probably be 50 showed appointments which will take you about 8 weeks. After that it' be a hundred and then it and each one of these increases and you'll know for your business it might be a little different but the point is that you want to pace it so it's about eight weeks of production between each one. Now each one of these gives them a bump in title and a bump in pay. The pay bump is virtually inconsequential. We go from 50 bucks to like 55 bucks. like it's not a huge deal. But to them, they feel like

[24:16] they're making progress in both status and they have an objective measure of their of how well they're doing. Now, once they move their way through this and then imagine this, you're a new employee, you're getting trained up, and then boom, eight weeks in, you get a promotion. You're like, "Oh, nice. I'm doing well. This is good." And then they gain some steam and then boom, dude, eight weeks later, they're like, "Hey,

[24:33] I'm a full BDR." You know what I mean? Like, this is great. I got another raise. Once they get to the top of this ladder, this is the key key nuance. You don't get promoted, you get the ability to be promoted. Yeah. This is when you get to here senior. Yeah. Yeah. Once you're a senior BDR,

[24:51] you now have the ability to be promoted. The benefit of this is it also eliminates all the HR conversations for I want more money. We're like here's the path. That's it. This is the career path. It also helps people become career salespeople for you. So if you have issues of churn for your sales team, this gives them a like, this is what my career path is. Here's an important

[25:11] point. You probably heard what I said about the BDRs. They do not get paid very much. They don't. Their their on target earnings if they hit all the commissions is 40 grand. Yeah. Wow. Right now, how do you attract someone who can do this job well for $40,000? You don't. You attract them because they know that the guys who win the lottery

[25:32] make 200 grand a year. And they know because they have a clear career path in front of them that if they hit their metrics, they could get there in 9 to 12 months. Yeah. So I'm like, what job in the world can you go from zero to 200,000 a year in 9 to 12 months with no degree? Here you can because we're pure meritocracy and

[25:49] the numbers don't lie. And so at the SDS level, it's the same exact thing. Junior SDS, uh, associate, just the word, and then senior, right? So we have each of these levels and there's tiny bumps in comp for each of those and they really should just be almost sign uh symbolic more than they are

[26:09] significant. Yeah. Because like the title is more important than the cash but the cash just goes okay and because you Yeah. Yeah. Exactly. You honestly you could probably get away with this without even changing anything. But I like I like to give a little something and then they feel like there's there's some stuff. Ricky's got a question. If someone's level if someone's results drop, do

[26:25] their levels drop? Yes. Okay. So you can go from senior to associate or whatever. You have to you have to continue to earn your position. If you if you drop below qualifiers, you drop down. You go back to AAA. Just like baseball, you go back down. Yeah. They get relegated. Exactly. It's exactly that. And the nice thing is because of this, everyone knows where they stand. So it cuts down some of the the useless communication of like pay and when am I doing how well I'm It's like, dude, it's

[26:53] right here. Everybody can see it, right? And it's built like this Christmas tree because they see the top closure. They see their checks and they're like, "Fuck, that could be me, right?" And they know they can they're counting the weeks until they can get there. Now, when we start scaling, because we add more BDRs, it trickles up the tree and

[27:08] we're going to need another uh closer. And so, we look at the guys who are who are qualified to be promoted and we pick the one that we think is going to be the best fit and they get bumped. They get bumped up to the bigs and then they and then it's it's try or die. Like, they've got two weeks to show us if they can close. If they can't close in two weeks,

[27:24] they drop back down. They get 10 deals. If everyone's curious, you get 10 deals to try. You don't close one out of 10, you're out. Realistically, you should close more, but their first 10, they got to close them. Yep. And the reasoning behind that is I' I've run and trained and scaled a lot of sales teams. I have yet to find a killer who doesn't close in the first two

[27:43] weeks. Yeah. Not once. Yeah. Tons of guys who start hot and then fizzle, but no one who starts cold and then gets good. What are your uh qualifiers for SDS and or BC is clearly s you know deals done. SDS is just BC. It's it's it's qualified shows. Yeah. So they have to they have to qualify them and they have to get them to show

[28:05] that's that's really it. Yep. Because for example in that call if they can't get the person to be like yeah tell me more about that and they're like no I'm good. Then they missed it right. And so that's why the domain expertise for the SDS like lots of really cool little like if you have two or three really good nuggets that you always know are awesome weave it into that conversation and they're like And you're like dude this is like this much. This is like my fingernail of how big this is. Like you should like the fact that you didn't know this. It both worries me and excites me for the

[28:35] opportunity that I think you have in front of you. And honestly, I'm not qualified to talk about it, but this guy who's got a dick bigger than than Shaq and, you know, cured cancer by age six and helped 5,000 people just like you be better than who you are. Like, he can help you. Let me see if he's available.

[28:50] He really never is. He's always booked. Let me check. And then and then he does the thing. Yeah. I love it. So, we've talked about uh we've talked about this. We've talked about that. Yeah. Uh BC call. Um my hunch is it's closer framework. Yeah. Can you just give us like the the Yeah. Yeah. So, um we use I I like to teach a really simple simple acronym. Most most of you guys on here already know how to close, so you know, I won't bore you with it, but yeah, you could use your own or if you don't have one, you could model from this. There might be something you could

[29:22] steal. Yeah. So, we make sure that every script uh follows closure sequence. Um it's always a question based framework. So, we like questions because people can just like say get off into Jupiter and you just ask them another question that brings them back. Um, each of these is kind of a milestone along the path. So C is clarify why they're there, right? It sounds obvious, right? But it's like, hey, so I know you, you know, you wanted some help with the sales thing. I know that provided some value to you. I know you talked to John and he showed you a couple more things. So like, why did you

[29:50] decide to take all this time? Like what's what's important to you about this? Like why are you not getting what you want? Like why'd you even take the time to show up this call? Right? And then they're like, well, and they're like, well, you wanted more information. It's like you just get information all day. You're trying to solve something with the information. You know what I mean? Because that would be that would

[30:03] be a smoke screen, right? like right so as soon as we get it then we nail them down and we label it which is L. So it's like, okay, so I hear what you're saying. This is the reason you show up for the call. So I just want to be clear that if we achieve this outcome for you, you would be happy, right? You would be like, you guys rock. I'd love

[30:18] you. Awesome. You can imagine that. Okay, great. Okay, so you've wanted this. So we go to O, which is overview, your past pain, right? We call this the pain cycle. So we're like, okay, so you've wanted this for however long. And what have you done so far to try? Because you seem like a pretty, you know, wellto-do person. You seem like you've got some work ethic. So I'm sure this isn't the first thing, you know,

[30:36] first phone call you've hopped on. They're like, "What have you done so far?" They go through it. We say, "Got it. How'd that work for you? What was good? What was bad?" Whenever they say something good, we say, "Totally." And we agree with it. If they say something was bad, we're like, "Oh, that's terrible." And we disagree. Unless there's a limiting belief that we need

[30:51] to pop before we get into the close. Yep. Then we go right back to the beginning. We say, "What else have you done?" And we keep going until there's nothing left. And we're like, "God, I can totally understand why you'd be frustrated at this point because it seems like you've done a lot." So, I feel like you got a lot of the pieces because the goal here is to make them feel like they're six inches away and

[31:05] they need one link to be successful. Totally. Right. So, dude, you've got all these right things in place. You're so close. I mean, gosh, I feel like you've got you're this close to to hitting your goal. So, you've done all this stuff. This is what you want. This is why you're here. Do you want to hear like I think you'd be a good fit for the program. You hear how it works. And they say yes. We get permission. And then we go into S, which is sell the vacation. So the reason we call it sell the vacation is that a lot of most people here already know this

[31:31] but a lot of sales people will sell your program right which is the plane flight they're selling TSA airbags take your shoes off your mask get vaccinated don't get vaccinated you know sit next to the person you fart next to you on the plane you're going to get terrible peanuts all of that and they're like yeah but then you're going to get them out and people are like it's like you got to sell them out you got to be talking about the trees and the wind and what it's going to be like to feel and experience that the status increase they will have amongst their peers as a result of this

[31:58] this decision and they're like got it. Okay. And when we do the seller vacation, we typically will limit it to three main points. And I think it's just because human attention span isn't that good. So you probably do tons of stuff. We do tons of stuff. We only talk about three things, right? Talk about get more customers, how to make them worth more, how to get them to buy more times. That's it, right? And these are the things that we're going to help them do. And we give a relevant analogy to those things. So, uh, you know, we just you want to have a quick anecdote that's 30 seconds or

[32:27] less. So, if I was selling a a coaching program for whatever, accountability might be one of my three things. And I'd be like, okay, well, and this would tie to whatever the thing they struggled with in the past. It's like, you know, I signed for stuff, but I didn't really get it going or I was struggling to like do it, whatever. Like, totally understand. It's reasonable. What do they do to hold you accountable? And they're like, well, nothing. It's like, well, then that's not your fault. They didn't hold you accountable. Of course, you weren't successful. That's not that's not you. Right? So, let me ask you a question. when you were a kid, did

[32:51] you uh did you love brushing your teeth at night? And they were like, "No." Like, "Did you go like, "Oh, mom, you know, you drag you out of bed, you brush your teeth, right?" And they kept doing that over and every night. You gota keep doing that. Keep doing that. Do you brush your teeth now as an adult? They're like, "Well, I mean, yeah, not a disgusting cretton." And you're like, "Yeah." So, what that was an example of is you had external accountability that turned into internal motivation. And that's exactly what we're going to do with you here in this program. Does that make sense? Great. We

[33:15] don't talk about Zoom calls. We don't talk about support. We don't talk about hour. They don't want to talk about any of that because that doesn't matter. They just want to know that something external is going to get them to do something internal forever. So we give them an anecdote about that. And so this is important because this is the only thing the sales guys have to memorize besides obstacle overcomes. The rest of this is is questions that they can always refer back to. All right. So for ramping up sales guys faster,

[33:38] questionbased framework, not scripting. This is just been my experience. It's easier to teach people. I I haven't found in my experience the super scripted stuff is best for like 20 minute super high transactional sales like $200 sales and less but that's probably not what anyone here is selling. So for everyone else question based framework kind of a diagnostic approach we follow this E is explaining with their concerns which is like got it this is the thing does that make sense would you be would you be opposed to moving forward today because it sounds like a good fit. Um then they're like well I wouldn't be opposed to moving forward

[34:08] today. They're like, "Great." And if for some reason they say yes, what we do is we do the exact same thing every time, which was we make some sort of concession, which is a bonus. And then we say, "Fair enough." Because all we're doing is concession, reciprocity, fair enough. And people don't like to feel like they're not being fair. It's a very human thing is reciprocity is super deep in us. And so if someone's like, "I don't know if I can do this." Like, "How

[34:29] about I throw this in?" Yeah. Three times. It's like, "Okay, it's got to be fair enough by now." Right. And so we explain with our concerns, which you guys probably already know. You've got spouse decisionmaker. You've got price and you've got uh delay, which is I need to think about it. I need more information. I got to sleep on it. Whatever. And so for each of those, rather than give you the things that we would drill our sales teams on, uh a decision maker close is going to adhere to the principles behind getting someone to understand past agreements, which is does your spouse or business partner know that you are

[35:00] struggling with this? Yes. Do they want you to continue to struggle with this? No. Why would they be against you fixing something they already know you're struggling with and they don't want you to keep struggling with? So, we're relying on the past agreements to go into the present and then we they're like, "I guess you're right." And then we usually will tag in a hey, sometimes it's better to ask for forgiveness information. Fair enough. Great. And then we we close them. That would be for a decision maker. For a um for a uh if it's by the way, if it's B to C, you can usually get away with uh what if they

[35:29] say no? And honestly, you'd be I'd still blows my mind. People were like, I'd probably do it anyways. you're like then let's do it some you know let's rock and roll like but if it's business if it's B2B you you probably go past agreements and then uh and then usually if you have some sort of guarantee or some sort of out clause of like three days or five days if you you know get back and your business partner and usually we'll make a joke here hey you get back and your business partner says hey man I want you to be poor I want your kids not to have

[35:53] anything I want you live in the worst neighborhoods I don't want you to have generational wealth I want you to just to pass on a spirit of poverty to to all of the things that that spring you know fruit from your loins if that's if that's what your business partner says like totally understand and we'll just tear this up. But if he's like, "Nah, man. That sounds good." Then we'll rock and roll, right? And if he does say that first thing, you get have him give me a

[36:13] call and I'll talk to him. Fair enough. Great. And we go. So decision maker. We've got price, which is always anchored around value. This is usually more that you actually have to close on the sales guys, not the prospects. I'm going be really real with you. We don't drill price stuff that much. We drill the sales team on their

[36:30] conviction. Mhm. So, has anyone here ever had like a client event and had all these people there and get testimonials and like your sales team was there? Yesterday, right? Well, I'll bet you for the next couple weeks, your closing percentage is going to be skyhigh. I can tell you that when I had my brick-andmortar gyms, I would do weigh out days, which is like when challenges and stuff would end and people would be losing weight and crying and all that stuff. I would stack as many sales appointments as I possibly

[36:54] could while the layouts were happening. Yeah. Because my sales team was just watching people just hit their goal and hit their goal and they're like, "Dude, just sign up." Like they would even go through a pitch. They're like, I mean, what do you have to like just sign up? Like, and they rire of conviction. And the funniest thing in the world for everybody to hear is like understanding the theory behind sales is that you have a person who has conviction and then you have another person who has no conviction. And everyone knows that sales is a transference of conviction,

[37:20] right? It's a transference of belief. And the bridge of that is trust, right? And so the real intention is that we must make sure that a salesperson actually believes. And you'd be amazed at how many times they don't really believe in the product. Yeah. And one of the things that is important to understand is it's not a binary. It's not do my sales guys believe in my product. It is how much do they believe

[37:40] in my product. Hey, Alex. Yeah. This is epic. Okay. And you know what I love? Uh I said I'd like you to talk about this. And you said no, I want to talk about that. And I said, well, let's do both. you've done a really good job of doing doing what I wanted to talk about. So, um

[37:55] I like talking about sales. No, I get it. Uh in a minute, what I'd love to do, let's just do the third objection to kind of close the triangle here and then let's do a quick Q&A and then let's talk about scaling selling. Is that cool? Yeah. Um so, last one's uh I need to think about it. And so, for most people, they don't know how to make a good decision. They're afraid of making a mistake. And so, we like to be as direct as possible, which is like let's toss best best case, worst case. This is what happens. This is what happens because tell me what your deepest darkest fear

[38:24] is, right? Is that I take your money and XYZ that you think is going to happen isn't going to happen. But not only that, let's be real. Your husband thinks you're a failure because you spent money again, right? Your friends are like, "Oh, here she is again." You know, or here he is making another business program thinking he's going to make money, right? That's what the real pain is, right? It's not the money. I mean, sure, but the thing is is the

[38:43] money's going to come back, right? Because you're not going to go homeless. And even if you do go homeless, I've got guys who living outside my building for 25 years, not starving, still good. So you really have nothing to worry about, right? But the real thing here is that we need to make this decision. So do you know how to make the We have a decision-making framework here. Can can I share it with you? Sure. So first question, yes or no. Do you think that

[39:01] we can help you solve this problem? Yes. Cool. Do you like me or do you want to work with us as a company? Yes. Cool. Do you have access to the amount of money that is required to start? Yes or no. If it's yes, yes, yes. Let's rock and roll. Because at the end of the day, you don't need more time. You need more information to make a decision and I'm your source of information and I can do

[39:22] this all day. Feels like you've done this once or twice. This is I'm making this up as I go. [laughter] 100%. Uh, okay. Sheila just wants to know the R in closer is is reinforce the decision. That's a great one. So close was actually my my acronym for like two years when I was teaching and then after really looking at it as the beginning of the customer

[39:42] journey. Yeah. uh we transition to having instead of a handoff, it is a handshake between sales and customer success. And so the point here is that the moment they close, the moment the card goes through, they're going to have immediate remorse. And so our goal is to totally reinforce the decision. Personalized video from the next person be like,

[40:01] "Hey, just got off the phone with John. I hear it." And this is an important point from an operational standpoint. It's like, "Hey, I heard you're trying to retire your wife. I think that's amazing. I heard that you were trying to get to $10,000 a month. I think you're going to blow that away. you're going to do such a good job. So, just to give you

[40:13] a heads up, tomorrow it's me, Tammy. Forgot to introduce myself and we're going to be walking through XYZ so that we can help you get your your wife retired as fast as possible. Cool. Really excited to see you. I sent you an email with all the details, too. See you tomorrow. Right. And so now they're like, "Okay, this is a legit company. I just got, you know, I just got off the phone, you know, the phone thing, and an hour later, I get this thing." I'm like, "Okay, this is cool. I feel good about this decision." And that's what we want them to think. I feel good about this

[40:37] decision. And we're like, "Great." And then it decreases the the the the cold feet and walk outs and backups and all that kind of Good job, Tammy. I'd love to know one thing you learned, one thing you loved, any follow-up questions. Let's do it right now and then we're going to switch gears. So, one thing you one kind of nugget you stole and any questions you've got, lots of exploding head emojis. Uh, what's the comp at each level? Let's scroll up here for a

[41:01] second. I wouldn't I wouldn't give you hard and fast. What I'll give you is OT, which is on target earnings. Cool. Uh, and that's what that's also what we present to the sales guys. So, this is the number of opportunities if you're getting if you're doing a 100. And the nice thing is that here's the cool thing with outbound is that it's reliable ads. You've got some days you got more, some days you got less. Maybe

[41:17] this campaign's hitting, maybe it's not. Outbound, it starts with a constant. You make 100 calls. Yeah. And everything after that is is is just formula, right? 100 calls means means we should get two people to show, two people to show. We should get uh five of those iterations to get one deal and so forth. And so if you're getting this many appointments per week, this is relatively the amount that you should be closing by percentage, right? If you close less than this, so if somebody's closing, let's say, 25% or less, they get they get bumped down triple A,

[41:45] right? And so for us, the the guys who were the bigs, they make the on the on the like if they're doing great, they make like 225. Yeah. The on target earnings, a loose range bridge, that's probably the Yeah. 150 to I say 120 to 220 is the range there for for AAA or at the SDS they make 60ish and that's a much tighter range probably like 55 to 70 you know what I mean like but I don't think anyone said this it's like 55 to 65 it's a 10k range and then uh and then the uh the BDRs are like around 40 grand helpful so you can see how they're shooting for

[42:20] that for that of course they are see and they're like how long does it take the answer's right in front of them on the right That's how long it takes. Yeah. What I love about this is you're thinking in uh quick achievable win levels. And um Maria just said, "Love eight weeks. Probably the same for our clients." H something [clears throat] to think about. Yeah. Jackson says, "Where are you finding these people? The homeless guys out the back that he

[42:43] talked about before." Yeah. Candidly, uh one of the big bottlenecks in the business was finding that. And I found out it took me I made a whole YouTube video about this, but uh basically my team was screening way too hard um for BDRs and my sales manager didn't know and so we're like no no no just let them all in and we'll see how they do because the cost because it takes two days to ramp them up and we don't really have

[43:10] any cost per lead. Yeah. Right. I mean besides the the data scraping which is not that hard and so we just let them prove themselves because it doesn't really cost us anything to have them work leads. Yeah, love it. Uh Yuri's asking, "Did you consider cold outbound email instead of cold calls?" Yeah, I'm pretty sure Phone Burner has follow-up email uh and text thing that goes with it. But I'll be honest with you guys, like the phones are the thing that that drive it. 75% of it comes from

[43:33] the phones. Yeah. I love it. Okay. So, Alex, when I said, "Hey, could you do a thing about a thing?" And you said yes. uh you said I'd rather talk about what I thought I would share with you guys if if that's okay with you is a couple of the kind of key lessons I've learned in this process. So I started this process because I was in a tremendous amount of pain, right? And I and I I ran out of future. I couldn't see a world where I'd want to continue to do this for the long haul, right? And I think I heard this from Chiron and I

[44:00] love it is that operators get burned out, business owners get rich. And I was still CEO. And that was the thing is that as much as I felt like I wasn't doing anything now two years ago I was 100% doing things but this year uh as we transitioned out uh I went from just making decisions to not really make just to just reviewing decisions which is kind of what we're doing now. And so the reason that we got the offers that we did in my opinion um is because we fixed the house. And when you fix the house that you're trying to sell, has anyone ever tried to sell a house and like you

[44:33] fix all the things that they say are wrong with it? And then you look at the house, you're like, why are we leaving this place? This place is awesome. Has anyone ever done that? Yeah. Well, the the biggest lesson that I feel like I've taken from this and I have I have two pages of lessons that I took I documented through this process um is that you only have one outcome. You have to sell the business, but it doesn't

[44:53] mean you have to have another acquirer. You can sell the business from yourself to yourself. Yeah. From your old self to your new self. And I also got a greater understanding of how the debt system works. So, if someone's going to buy your business for a big amount of money, they're not actually going to pay for your business, right? They're going to put 30% down like you do for a house, and then they're going to get a bank to to to finance the rest, right? You have a house that you own 100% in cash. You can go to the bank and get the 70% mortgage on your house and just take the money in

[45:25] the US at least taxfree. Jackson's nodding. He would know the Aussie, so he's nodding. He's like, "Yes, affirmative." [laughter] And so the point is is that in my mind two and a half years ago, the only possible outcome that I could do to get out of pain was to sell. And the thing that I had to sell was unsellable. And so the thing that we build has to be

[45:46] sellable. That's just my conclusion. It has to be sellable or you'll eventually burn out. And so if you make it sellable, then it actually sits as an asset on your personal net worth balance sheet and it continues to provide cash flow. Um, I had so many stories that I would, you know, that like the story of the sale for me it was like I need a big sale to to be legit. Some of you guys may laugh at that like he's doing 85 million year, but in my head I was like, well, and then I had a friend who's like, dude, you've already sold six companies. I was

[46:14] like, yeah, but they weren't like as big as this. And he's like, you really think that matters? I was like, huh? And then it was like, what about the what about the story of of the money, right? About the increase in net worth? Well, here's here's an interesting one for you. Say you have a $100 million sale, right? Everyone talks about it. It's so amazing. Well, most of

[46:35] the times it's not $100 million, right? What it is is they'll probably give you, you know, 60 million upfront and then you'll have a $10 million seller note that you finance for five years and then you'll have uh you'll have a earnout, right, for another 20 million. Uh that if you hit X, Y, and Z over the next year or two, right? right? Or it could earnouts can be as long as they want,

[46:58] right? Um and uh you're going to roll another 10% in equity, right? And so all of a sudden this 100 becomes 60. But wait, there's more. So now we got 60 million. Well, you probably have some bonuses that you want to give to your staff. You're going to have a broker that you'll probably have to pay three or 4%

[47:14] to. So let's let's do it. So 4% of 60. Now we're down to to 57, right? Uh and I'll just wrap in some of the bonuses on top of that. uh depending on how your your equity structure if you're 100% whatever then you have your capital gains [clears throat] tax you have an escrow fee. So capital gains for us in the states at least is 20. So now we have 20% off of the you know let's say 55 after the escrow. That would be actually at a size that big it would

[47:40] probably be more like 50 after escrow. Uh 20% of that would be 40 million. So now your $und00 million sale is 40 million bucks. It's not as cool, right? at least for me like hearing how it how how it would break down and so I've tried to be as transparent as possible because like there's the there's the story of the sale that we tell ourselves and there's the reality of the sale because here's the second part of it. I talked about the money side but what about the attention headsp space energy side because that was another story. I was like, "Well, if I sell, then I'll be

[48:12] able to go do stuff that I really, you know, I'll get all this attention back and all this stuff, right?" Well, one, the amount of stuff they want you to do is gonna be directly proportional to how much stuff you're doing now. So, if you want to sell the business, you got to do it in a way that you're not doing anything. And if you're not doing anything, then why sell the

[48:28] business? Yeah. And so, for me, I told myself this story, but the reality was they wanted me to show up for quarterlys and be available for the occasional uh like strategic like, "Hey, can we touch base about something?" Mhm. Which is exactly what I currently do. Yeah. So then it's no longer so it's not a question of money because if you're selling for that amount of money, you're probably been making money for a while, right? So it's not going to materially change your net worth unless you're in software in which case it's a different, you know, game. But for most of us here who sell service businesses of some

[48:56] kind, you're probably pretty high margin, pretty high cash flow, and you probably have a decent amount of money. After you get this kind of downstream impact of what's actually going to be added to your net worth, then the question is what am I going to take with the 40 million and buy that's going to create me because if you're selling for 100, you're probably doing 15 million in in in profit, right? So, what am I going to go buy with 40 million that I can get $15 million of profit every year from that I don't have to do anything for, right? And so I had the story of what

[49:24] the sale was going to mean to me in terms of my reputation which was completely living in other people's eyes which was useless and irrelevant and not true. I had the story of money which is this is going to be a big change in my life but when I looked at all the numbers I was like this will change nothing about my life in no way like I nothing because unless you get into another stratosphere of wealth y like it nothing's going to change right so then it goes into the energy and headsp space. I was like, "Okay, well I'm doing the same thing before as

[49:52] I am now." And so, thing by thing, there's the story of what we think it is versus the reality of what it is. And so, um, the the biggest thing that I feel like, uh, has been my biggest takeaway from this is that when I've looked at, and I have a big thing on private equity lessons that are really cool, too, but it's probably running out of time. Um, I learned from the guy who lives above me. So, the guy who literally lives right here, he does 3.8 billion a year in in revenue. He owns his company 100% outright and he does 26% net margins, privately held. That

[50:26] means he took home $935 million in income last year. The secret to success, he said, "I've been doing the same thing for 40 years." 40 years. And so what I feel like I I continue to witness is that the wealthiest people in the world, and I'm I'm stealing this from Chiron, is they buy and they build and then they

[50:45] refinance. So you don't need to sell. And the only reason that you would sell is because you think the party's over. You think that this thing is no longer going to be a thing anymore long term. Yeah. But if I make a bet that gyms are going to be here in 10 years, which I do think gyms are going to be here in 10 years, right? Or your business, whatever the the space is, is going to be there in 10

[51:04] years. Well, then what's the reason for selling? So, and I got this from my closest friend because he was like, "What problem are you solving?" And I was like, "Well, when I started this process, I was in a ton of pain." He was like, "Okay, are you in pain now?" I was like, "Well, not really." He's like, "Well, what do you think is going to happen post sale?" He's like, "It's He" He's like, "Fuck the sale." He's like, "Match the conditions." He's like, "What does your life look like after the sale

[51:27] tactically?" Yeah. Is there a way that we can make your your your life look this way before the sale and keep the damn thing? Yeah. And so then we started looking at it from can we match the conditions? And so if you can do that, then you we build the thing instead of a really highpaying CEO job, we now have an asset that is sellable and can can carry debt on our balance sheet income tax-free that we can then use to go invest in the other stuff that we want. And as the company grows, it pays off the debt. And you have the thing that you're getting the

[51:57] debt who's continuing to grow as well if that's what you want. All right, dude. I got I got two thoughts in my head. I just want to throw them to you and you can do something with them or not. Yeah. Two things I see happen a lot in boardroom is people hit their, you know, their number. It's not 100 million often, but it's the, you know, like it's like the dream, they've now hit it and they're like, well, what the hell do I do now? Um, so that's a really common thing. And then the the other thing uh talking about exit not exit is really interesting but one of the things

[52:29] you've done to um to get exitable is to take the name off the door. Yeah totally. So the name off the door I just want to prepare everyone is like a is like a three-year process. So it takes a lot more time than you think it will. This is I would just share the things that work for us. All right. So

[52:49] just said we have no YouTube strategy. Honestly, Alex just likes making videos and is a great teacher. Yes, that's it. Thank you, Laya, for unpacking the strategy. Yep, that is the strategy. Um, so first thing is we edified customers uh into specialists. And the the key nuance here is that we don't make generalists because generalist means they can replace you. And you actually either have the problem of having another face that's not yours or you have the risk of that face walking. But either way, it's either a face that doesn't make it sellable, which is the same weakness, or you have a face that becomes a threat to

[53:18] the business, right? Either way, it's not good. And so we make siloed experts which we call subject matter experts that specialize in a specific thing. So you might have somebody who's really good at sales, somebody who's really good at lead nurture, somebody who's really good at ad buying, somebody who's really good at pages, somebody whatever the thing is so that you can have people tag those clients and they become kind of the the the customer support but like with special specialization. Beyond that, you take some of the better customers you have who want to exit their business and just love your brand and you say, "Hey, wouldn't it be cool

[53:45] if all you did was talk about this all day?" And they're like, "Dude, this is all I want to talk about. I don't even like I don't like dancing anymore. I want to talk about dance, right? C Clinton. Um, and what if we just helped you just help our clients better and then they become the head of product, right? Because if you think about the things that we're probably doing, you're probably an expert of some sort. So, you

[54:01] need to replace the product expertise. So, first you got to get a person, then you got the process. The process around this is called the beta process. Every single private equity firm that we talked to loved this process. So, you can write it down. I actually learned this from management consulting. The way that it works is that if we need to solve a problem, so there's always a problem to be solved, right? All ask your customers. There's plenty of problems, right? So ask them for these are problems your clients have problems. Is that what you're talking

[54:28] about? Yeah. Yes. And then they can upvote the ones that are the most salient to them. You take the ones that are the most that are that are plaguing the most people and then you say, "Hey, who here is doing really well with this?" And then you get and you you draw a line. And ideally,

[54:42] it's depending on the the client size. For us, we look at the top 1%. So, you've got a thousand locations. Top 1% is 10 people. So, I want a group of 10 to 20 that are in the top echelon. So, cut the percentage wherever you want to get 10 to 20. And then we do a round table. And so, the benefit to them is that they get to kind of get a a bonus mastermind with you for free in exchange for sharing all

[55:00] their secrets. Yep. What we do then, and this is the qualitative process, is that you write down everything that each of them says. Step two is that you reorganize the notes and find the common commonalities. And the point here is not to do all of the things they do, but to do the things

[55:15] that all of them do. And so a lot like the list that I had for reducing churn was like 180 items between all the guys, but the one thing that the five things that all of them did is the only five that I took to make the solution. And so once you have that, you consolidate the solution and then you take the guys who are the bottom 10% and some middle guys and you say, "Hey,

[55:34] I have now productized the solution." And you deliver it the same way you would to your customers, which is through a portal and blah blah. Don't do anything extra because if you did then it would it would up the results. You say I need you to go through this and we're going to report back in 30 days, right? And you cons, you know, have a cadence with them, you know, once or twice a week, whatever. You then measure the results. Here's what's cool about this one is if it works, you just have something that delivers tons of value and you didn't have to generate it. A

[55:58] process generated it, which means it's not you, you're not the guru, you're not the face. A process drives the innovation. Yep. The second thing is if it doesn't work, you still report it because every entrepreneur would love to know failed tests. Yeah, I would love to know if this headline worked at this one. Even if it didn't, I want to know because then I don't want

[56:13] to try it. And so it still provides value even if it doesn't work because you proved it didn't work. So I just want to share that with you because if some of you guys do experiments and they didn't work, share it. It's valuable. So that's on the product side, right? on the the marketing side, we slowly introduced other people in the ads until eventually it was just them in the ads, right? And then additionally, we obviously started the outbound team so that we had multiple channels. So there was like name was the one issue which we solved by getting me out of the inbound and then channel dependence was the

[56:49] other issue which we solved through outbound. Right? And so those were the you know those are the two solutions uh on that. Now, I want to share something that I think is more important than everything that I've said. So, maybe you can unshare the the the thing for a moment. Um, when when when I'm sharing the things that are working for the

[57:08] outbound team, you can't do it. Like, you can't do it. Like, if you get to a certain point, if you're at 10 million or you're 15 million, 20, like, you can't do it. You need other people and you you can't hire people with the intention of training them to do the thing. It's not, hey, we need to build an outbound team together. It's I know that you built two outbound teams for similar type products as me. I need you to do the same thing here. Here's some really favorable upside potential for you. Uh, and I need you to build it from here, and I'll give you all the leeway

[57:38] in the world. I'm incredibly patient as some as long as I see progress. Yeah. So, I have very low patience if I see no progress. If I see progress, you can go as long as you want, as long as we're making progress because I know we will eventually get there. And so I think that if you use that as a frame of mind that we're not looking for people who know how to run, but we're looking for people who have already run an Olympic

[57:58] gold and want to run another one. And I'm telling you, if you find the players, you will be able to build something significantly bigger. And this was a breakthrough that took me way too long to learn and it sounds stupid because it's so trit and overstated, but like you need to find champions and you got to pay them well and it will be worth it. And there's a book, I don't know if Leila put it in there, but there's a book called uh The Motive, which is a a one-s. It's 130 pages with big text and it it fundamentally changed me as an

[58:29] entrepreneur. And I I really think everyone should read it because you can read it in an hour and a half and it will change the way you see operating a business because at the end of the day, it's just an assembly of people. If you want it to be a business, if it's you with a thousand helpers, it's not a business. it's just a really high paying job, right? And so you got to get people who can do it. I know it sounds stupid and it's obvious but like that's the belief is that and I was stuck at mid30 million for three years and I had Mark Ford who wrote

[58:58] Freddy fire aim write his book and he said the the thing that you get stuck at 30 and I like skipped to the chapter where he had 30 million as a breakdown and he said if you're stuck here it's because you're the only one that's you're the juju you're the steam you're the fuel behind the growth of this thing but at a certain point there's only so much that one person can push it you get the fourth level of infrastructure in the business and they don't know who you are. They don't know your vision. They don't know how you do things because they're so far they're so far three

[59:26] levels you're okay. Fourth, it's an organization. It's it's beyond tribe, right? Um and so I was going somewhere with that. Uh when I hit when we hit 30 and I read the book, he was like you need to find other people who can own their own P&Ls and become entrepreneurs within your company. And what happens is it becomes a shift from being a business to being a conglomeration. And so if you think about Amazon, they're not Amazon's not a business, right? It's a business of businesses. It's a collection of

[59:54] businesses that serve a purpose, right? And so I had to shift my thinking in terms of how mine worked to we have a number of business units that operate off of one shared spoke of shared services. We've got IT, HR, legal, finance, all in the middle. And then we've got profit drivers that drive revenue across the business units. And the people who drive those are responsible and compensated based on the growth of their business line or their product line. And so then you get people who can start making 300 grand, 400 grand a year, 500 grand a year if they crush it. And they should because

[1:00:28] otherwise they'll just start their own version of your business. And so if you can give them that, you can attract the entrepreneurs um who want to drive growth, are really good operators, and just have a little bit less risk uh you know, tolerance. Yeah, epic. So that's the So that that's that really goes for any of them. So like outbound, if you're growing outbound or you're like, man, no one can ever market like me, there's somebody who's better than

[1:00:50] me. Yeah, there totally is. It's it it's bad for the ego and good for the business. Um, so dude, can we talk for a minute about um about I don't know what the word post exit. Post exit. Not even post exit, but like post I've hit my number. What? You know, I'm bored. What's my new role?

[1:01:11] Yeah. Uh, you know, who am I? What do I do? That stuff just for a couple minutes. Yeah. So, I made a video on YouTube about this, how passive income was overrated. And uh it was because we had completely replaced ourselves in the business and it was still making a lot of money and uh and then we started acquiring other pieces of businesses and whatnot and those continue to cash flow and I was like what do we do like we have nothing to do all day and so I think what I messed up is that I continue to pursue freedom right because that's what all of us here at least I

[1:01:39] did is freedom was the goal right um and I thought that it was freedom from work when when in reality what I should have done was freedom to do things that I wanted. Um, and for me, I want to work. And it took me a year to give myself permission to work again because I always thought that if the business relied on me, it wasn't a business and I

[1:02:01] was doing something wrong. And that was a story that I was telling myself. And I love working. And I think that if all of us achieve the levels that we have right now, it's because we love working. We love doing this. And we still have this dream of this exit in our minds, but it's not it's I'm just

[1:02:20] it's it's a it's a farce. It's not true. And you wake up the next day and all you do is, you know, and there's just another blunk of money there and you're like, well, I mean, you can only go out to so many nice dinners and nice restaurants and nice shows and at some point you're like, I got to do some And so like I would say that you don't need to go through it because I spent the last months, nine months doing nothing and being bored out of my mind and wondering why I even existed. And then it just eventually gave myself permission to just do the things that I

[1:02:46] like doing. And if it just happens to be that it makes money, great. And for me, and again, I I got this from Shiron because it's been it it was um so good. But like the things that light me up are buying and building is it's expansion. And so you know, if we end up selling, I don't know, they gave us the offer this morning. Maybe, maybe not. Um, but I do know that whatever it is, it's going to be the decision will be aligned with

[1:03:11] what I am building next. Yeah. And if I think that keeping this will help me build that better, faster, stronger, then I will keep it. If I don't think that, and I will tell you this is when I was contemplating the sale, I I could not see past the decision because it was an unmade decision. It was like black. It was like I lost my vision. I couldn't see past this unmade decision because it was this variable, this huge fork in the road in my life. I immediately, and I you not, I immediately knew what we needed to do to grow the other company to 30

[1:03:40] million in IBIDA and what we're going to do for the new company because I'm still building the next company no matter what. Um, and so I think that the season that I just went through, and I feel like it took me two and a half years, um, was transitioning from CEO to owner. And it took a lot longer and it was a lot more emotionally difficult. A lot more emotionally difficult than I

[1:04:00] expected. Why? Identity, you know. Um, I mean, Ila had a conversation with our team yesterday. They're like, "It's so nice that you guys are gone." They're like, "Can I tell that story because it was really Did you say that to them or they said that to you?" No, they said it to us. They're like, "I

[1:04:17] don't want to offend you guys." Sorry. I thought later was like, "It's so great not having you guys in my life." Sorry. No, I just thought it was interesting because it was, you know, I think both Alex and I had always prided ourselves on, you know, for me it was like, I have to be the example. I have to be working my ass off, doing more than everybody else so that they, you know, because they're all a players and so I want them

[1:04:36] to see that I'm doing the same. Yeah. Yeah. And I was talking to one of our our guys who's really stepped up and he's one of the, you know, one of the highest ranked people in the company. And I check in with him once a month rather than, you know, the because he's not the COO or CEO. And um I said like, "How can I support you? How can me and Alex help? You know, just wanted to know at the end of the call." And he said, "Can I be really honest with you?" And I was like, "Yeah." He said, "It's really

[1:05:01] nice not having you guys around." [laughter] He's like, "Yeah." Yeah. He's like, you know, everyone feels so much more creative. You know, they have to be way more self-reliant and all of us have just been able to step up so much more since you guys have stepped out. And so, we're just growing so much as a team.

[1:05:17] We're so much stronger. And I was like, man. Like, everything that you do to get to like 90% of the finish line, the last 10% requires you to do the complete opposite. Yeah, that's fascinating. So everything about every entrepreneur, every level of entrepreneurship based on my observ my personal experience has been it's it's relinquishing control or at least the perception of control. And so you know when you're when you're at zero to a million, you're giving up pause for a sec, Alex, because here's what I'd love to I'd love to do and I think you're going there, but I just want to

[1:05:47] Yeah. I want to mind melt. So let's say we got this we got this journey and we've got the you know the zero to one and then we got the one to what's the next jump? Is it three or is it 10? 10. Perfect. I say 10 to It's like 30 to 50. It kind

[1:06:01] of depends on the on the company. Perfect. And then we'll go up from there. A lot of the people on this on this line right now uh kind of in this space and we've got some in in this space, but can you just do like top three for this for this space right here? Yeah. To get past the million, you have to give up um everything with fulfillment. So, customer success, fulfillment,

[1:06:24] customer fulfillment, right? Yeah. Exactly. life fulfillment. You have to give up your fulfillment. [laughter] Um I mean that's the that's the the the key part. You're also giving up if you're going one to 10, you can't sell anymore, right? You need someone you need a team of people who are selling on your behalf. So it's you have to not only be able to sell, you have to teach people how to sell, you have to know how to recruit sales people, you have to know how to manage salespeople, you have to know how to send salespeople um and continue to get them uh performing, right? And that's a different skill,

[1:06:54] right? We know how to sell. How many people be like, "God, I close these people so easily and no one else can sell them like me." It's like, it feels good, but you're still way poorer than somebody's got 20 sales guys closing for them. So, like, just get over it. Like, there are people who are better than you at closing because all they're going to do all day is close. You still run out

[1:07:10] of business. Yeah. So, you got to stop selling. It's my opinion that 10 to 10 to 30ish is you have to give up the marketing. You have you really have to get beyond that. And then at going 50 plus, you know, 30 to 50 plus, it's like you have to give up the leading, which is difficult, right? And the and the zero to one, I'm just I'll throw it in there for fun, is like you got to stop doing, then you go to managing, and then you go to leading, and then you go to decision- making. Um, and so you could say leading and

[1:07:38] decision-m, decision-m is above leading. Um, that's kind of the ultimate, I would say, exit is that people are making decisions on your behalf. Oh, my bad. I got these thrown around. Alex, would you say for 50 plus, because this is what I was think I was making a presentation like this the other day and uh I think for 50 plus, you go from being the leader of the company to you lead like the one sole leader, but

[1:07:58] you're actually just the resource. Yeah. You're a guide. You're just a guide. You're an adviser. Yeah. You provide capital and you provide connections, network, vendors. That's what like PE does. That's what you know the big guys do. Yeah. This is great. So, can I just say something to cap this real quick? Yeah. is that so if you're stuck right now, you have to think what do what am I holding on to that I need

[1:08:20] to give up? Great question. And when you're giving away control, I'm not saying, okay, well, I'm not going to be involved in sales anymore. It's like, no, you have to learn how to put a good leader in there, who knows training systems, who knows how to recruit, who knows how to hire, who knows how to send, who knows how to keep culture and build a team that can that can work together, right? Those are a lot of attributes. And you know, your skill is how do you find that person? Because the because each one of the skills begets the next skill. You have to learn how to

[1:08:46] close. You got to learn how to teach other people to close, right? Then once you have other people closing, you got to learn how to teach lots of people to close and maintain them. Then you got to learn how to recruit a sales manager who knows how to do that, right? And so each of those are kind of the levels and they also mirror, if you think about it, they mirror the levels of of organization in the chart, right? If you're doing it, then there's there's it's just you. If you're managing, it's one, right? If you're managing a manager, it's two, right? If you're now leading business,

[1:09:11] you you're leading people who have business units, right? It's it's it's three, right? And so, and then finally, you know, you're you're advising and you're letting other leaders lead directors who have managers and customers. And so, right now, I think the this is our fifth level of hierarchy uh within the organizations. And so, they now function as assets

[1:09:33] um that produce cash flow. Yes. Yeah. Many innovators. A million%. This is so great.

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